Do you need to file a Self Assessment tax return?

With the 2021/22 tax year ending on 5 April 2022, taxpayers within the Self Assessment system will have recently received ‘notice to file’ letters from HM Revenue and Customs (HMRC). That then begs the question, do you need to file a Self Assessment Tax Return?

Whilst Income Tax and National Insurance are usually deducted automatically from wages, pensions and some savings, individuals with untaxed income or capital disposals must complete a Self Assessment tax return. In short, Self Assessment is the system used by HMRC to collect Income Tax, Capital Gains Tax and Classes 2 and 4 National Insurance Contributions, and for taxpayers to claim additional tax relief on personal pension contributions or tax effective investments.

You must file a tax return if, in the last tax year to 5 April 2022, you were:

• self-employed as a ‘sole trader’ with gross earnings of more than £1,000,
• a partner in a business partnership,
• in receipt of child benefit and either you or your partner had an annual income over £50,000, or
• the beneficiary of foreign income, rental income or annual income from a trust or settlement.

Or you had:

• annual income over £100,000
• Capital Gains exceeding £12,300; or
• any other untaxed income (including Government or local authority grants).

For further guidance on whether you need to file a Self Assessment tax return, visit the Gov.UK website

Registering and filing deadlines

You’ll get a penalty if you miss the deadline to submit your tax return or pay your bill, so…
If you’re not already registered for Self Assessment but need to complete a tax return for the 2021/22 tax year, make sure you register with HMRC by 5 October 2022 to avoid receiving a ‘failure to notify’ penalty.

Tax returns can be submitted on paper or online, the deadline for paper returns is 31 October 2022, whilst electronic returns can be filed up to 31 January 2023. That said, returns can be completed any time after 6 April 2022, and it makes sense to get yours in early so that you know about your tax liability well ahead of the 31 January 2023 payment date, and to secure early closure of HMRC’s enquiry window.

How we can help

The Self Assessment tax return process can be a daunting one if you’re not familiar with it, and it’s important that you get it right to avoid enquiries, unexpected tax liabilities and unwelcome headaches. Whilst there’s some useful help and support online, it’s fair to say that the more complex your financial affairs, the more likely it is that you’ll benefit from professional help with your Self Assessment tax return.

We’re here to help you ensure that you are fully compliant and in the best tax position possible. Please do not hesitate to get in contact with Private Client Senior Manager, Bev Holroyd, a member of our Private Client team or your usual Sagars contact.